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By how much would the roe have changed

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Reference no: EM132708842

Problem 1: Last year Racatak Inc had a total assets turnover of 1.42, total assets of 5,250,000 and total debt of 1,950,000. Its sales were $1,350,000 and its net income was $248,000. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by 33% without changing its sales, assets, or capital structure. Had it cut costs and increased its net income by this proportion, by how much would the ROE have changed?

Reference no: EM132708842

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